Antong Holdings, a major domestic container shipping operator in China, has announced that creditor AVIC Trust has applied in court to restructure the company due to its inability to repay debt.
The court case against the company comes only six months after Antong Holdings entered into a strategic framework agreement with AVIC Trust and China Merchants Port Holdings to start a series of collaborations. Under the agreement, the three parties set up a joint venture called China Merchants Antong Logistics Management Company, with China Merchants Port and AVIC Trust agreeing to provide RMB50m ($7m) and RMB200m ($28m) loans to the jv respectively.
Antong’s two major subsidiaries, Antong Logistics and Ansheng Shipping, have already entered into a restructuring process at the request of creditors in December last year.
The controlling shareholders of Antong Holdings, Guo Dongsheng and Guo Dongze, are currently dealing with a serious financial crisis after an illegal guarantee scandal involving Guo Dongze was disclosed, with total liabilities of the Guo brothers amounting to RMB8bn ($1.1bn).
In the meantime, Antong Holdings announced that Zheng Shaoping, chairman of company, and CFO Ai Xiaofeng have both resigned.
According to Antong, Zheng also serves at China Merchants Port Holdings, which is a major creditor of the company and he resigned to guarantee the fairness during the company’s restructuring process.
Zheng, vice general manager of China Merchants Port Holdings, took over as chairman of Antong Holdings last year after the Guo brothers quit the management of the company.
Antong said it would actively work with the court and administrators if the court rules to restructure the company and it believes the potential restructuring would help the company improve its balance sheet.
Antong Holdings currently operates a fleet of 116 ships with total capacity of around 160,000 teu, making it the second largest domestic container operator behind Zhonggu Logistics.